How to manage global B2B payments: your comprehensive guide

Managing global B2B payments is one of the trickiest operational challenges for growing organizations thanks to a complex interplay of 3 major issues:

1. It’s impossible to manage payments on a global scale manually, especially for businesses handling high transaction volumes.
2. The technology that makes global and cross-border payments possible often has its own implementation problems: different tools are supported by different banks in different countries, and different payment rails and networks adhere to vastly different standards.
3. Compliance regimes and governance aren’t always simple. If you want to make payments to suppliers operating in dozens of different jurisdictions, you’ll likely need to use multiple different bank account types, payment tools, and payment formats. “Multi-currency accounts” and digital payment engines may not be enough to manage all your needs, especially when it comes to reporting and regulatory oversight.

All this said, getting your global B2B payments right is vital as your organization grows. An inability to pay suppliers on time is a bottleneck to your expansion, especially as businesses worldwide increasingly expect transactions to be completed in real time.

In this guide, we’ll walk you through your options when it comes to managing the challenges. We’ll explore the operational basics, the way that the global B2B payments market is changing thanks to technology, and the approaches you can take to streamline the process and turn it from a back-office annoyance into a durable competitive advantage that helps maximize your working capital availability and minimize your risk exposure.

Global B2B payments: the current reality

The idea of “global payments” has always been a tantalizing one for businesses. Nobody likes barriers to receiving funds, and we all want to have access to the largest market of vendors possible to find the B2B payments solutions that are right for us. But global enterprises that have to manage the reality of “global payments” know the vision of a frictionless, borderless financial world isn’t so easy to achieve.

As technology advances, and as payments become decoupled from traditional bank accounts and the “old school” relationships between organizations and their banking providers, the tools that make instant domestic and cross-border payments possible often create huge additional management and compliance burdens on the back end.

This creates an environment where businesses must face a host of interlocking challenges and barriers that aren’t easy to resolve.

Obstacles to managing global B2B payments

1. Global finance is complicated. And the complexity of enterprise payment ecosystems is spiraling out of control. Companies operating with multiple subsidiaries across different countries and compliance regimes can end up forced to manage dozens or hundreds of different moving parts.
2. Digitization creates more problems. Automation and digital systems can of course create huge efficiencies. But the proliferation of tech solutions, intermediary services, and the management of bank connectivity and increasingly stringent real-time compliance overheads in different regions creates new challenges. Security is of particular importance here–not just in terms of guaranteeing the payment process and preventing fraud, but creating secure and legible audit trails for both internal and compliance purposes.
3. Manual processes are still the norm. Despite the high potential for automation in payments and the rapid adoption of digital payment technology in B2B, processes are still mostly being executed by human hands on keyboards. There’s three main reasons for this. First, reservations around security. Second, many are reluctant to embrace cloud-based B2B payments solutions (even if they have a “cloud first” strategy) for fear of embarking on yet more lengthy and costly transformation projects. Lastly, the sheer complexity of the in-house setups many have been forced to develop to handle individual payments challenges as they arise makes pursuing an integrated approach difficult or impossible.

This complexity – and the costs and inefficiencies associated with it – is only likely to get worse over time.

Factors contributing to the complexity of B2B payment processing

• Banks will grapple with nonbank providers to control critical client relationships.

• Payment volumes will continue to rise.

• The growth of digital public infrastructures will catalyze the adoption of digital payments in business while opening new developing markets to cross-border payments.
• New security, regulatory, and management overheads will inevitably follow.

The anatomy of an international B2B payment

The simple act of sending money isn’t as simple as it seems. To execute an international transaction, seven steps need to be followed.

1. Initiation. The organization making the payment (usually via its AP team, Treasury team, or a dedicated Payments factory if following a Payments-On-Behalf-Of or POBO model) requests the transfer. This happens either directly via their bank account, through their ERP system, or on a dedicated cross-border payment platform. They have to enter recipient bank account details, the amount, the currency, and additional remittance information. This can be the cause of numerous errors and delays if this information has to be generated, checked, and validated manually.
2. Compliance screening. Before the transaction starts, the bank or payment provider screens the details against anti-money laundering requirements, Know Your Customer (KYC) data, and various international sanctions list. This is an important step in fraud prevention, as wire transfers are highly vulnerable to payment and procurement fraud attempts.
3. Routing and rail selection. We’ll talk more about rails below. For now, all you need to know is that different payments have to follow different paths depending on destination, speed requirements, and cost considerations. The payment rail determines the speed with which the transaction will complete, how much it’ll cost the payer and payee, and settlement certainty.
4. Bank correspondence. Many banks don’t maintain active relationships and rely on radically different processing protocols. If the sender and recipients’ banks don’t have a pre-existing relationship or agreement for payments, an intermediary or “correspondence bank” will be recruited to relay the funds. This adds another layer of delays, costs, and opacity to the payment processes. Many international organizations find this to be the most fragile and time-consuming points in the process.
5. FOREX conversion. Many international payments involve currency exchanges, and this can occur at any bank involved in the transfer. If multiple conversions are needed, costs mount quickly.
6. Settlement. It’s only at this point that funds reach the recipient’s bank account. This can take anywhere from a few seconds to an entire working week depending on the payment rail used, conversion requirements, and intermediary banking involvement.
7. Reconciliation and posting to the general ledger. Once funds arrive, the recipient and sender must match the payment against the original invoice, reconcile currency differences and fees, and post the transaction to their general ledgers. This is often a highly manual part of the process, and the source of most of the errors associated with it.

What are the components of global B2B payments management?

To effectively manage your global B2B payments, you’ll need to consider 6 different things. Let’s look at them from the most basic to the most complex:

1. Banking partners: The accounts you use set the foundation layer for your global B2B payments architecture. Different providers and account types will have different advantages and drawbacks (like institutional reach, multi-currency support, and tech integrations). You’ll have to carefully select partners based on your current operational needs and strategic scaling and expansion priorities for your target markets and regions.
2. Individual payment rails: “Payment rails” are the infrastructure that underlies your transfers. They’re called “rails” because they act like virtual train tracks, providing a standardized, compliant, and legible pathway and process that allows money to move from your bank accounts to your payee’s accounts. The payment rail is the infrastructure itself, while the payment network is the organization that provides the infrastructure and maintains policies and rules. Different rails have different strengths and weaknesses. The most commonly used include:
   a. Domestic rails like AHC (Automated Clearing House) in the US and SEPA (Single Euro Payments Area) in Europe are optimized for lower costs and faster processing within a specific territory. They’re best used for lower-value recurring bills.
   b. Physical and virtual cards are perfect for lower-value cross border spend like SaaS subscriptions, travel costs, and the like. They’re generally accepted in multiple geographies, they’re secure and reliable, but often restricted in the case of higher value transactions, and will likely carry higher fees.
   c. International wire transfers are set up to facilitate high value and global cross-border payments. The SWIFT network is the international standard for large enterprises, but for smaller or mid-sized enterprises, dedicated digital platforms often provide a more cost-effective alternative.
   d. Real-time payments (RTP) rails (like the US’s RTP Network, the UK’s Faster Payments Service, the SEPA Instant Credit Transfer in Europe, and PIX and UPI in Brazil and India) allow, as the name suggests, for instant transfer and settlement on a 24/7/365 basis. They’re a great lever for instant liquidity and sensitive transactions, but they can’t be reverse and thus pose some risks if your fraud detection protocols aren’t up to date. Most RTP rails support rich data transmission alongside fund transfers, which makes them a great tool for those looking to improve payment automation.
3. Cross-border infrastructure: Even with the right payment rails, you’ll need to put systems in place to guarantee compliance and efficiency, and also to mitigate FOREX risk. This can include:
   a. Multi-currency accounts for outgoing and incoming international settlements.
   b. Local accounts to mitigate FOREX fees and reduce banking intermediary fees alongside reducing the complexity of compliance on multinational networks with diverse rulesets (like SWIFT).
4. Technology platforms: Depending on your needs, this can include smaller dedicated B2B payment management services up through carefully selected platforms that integrate with your ERP systems of record. Larger organizations with complex needs might need to consider deployment of sophisticated networks of B2B payment gateways and automation platforms that communicate seamlessly with their ERP and accounting systems to guarantee real-time visibility and reduce manual workloads.
5. Operational and compliance networks: This includes the bread and butter of payment processing and facilitation, like:
   a. Invoice processing and reconciliation automation: Manually processing invoices is one of the single biggest bottlenecks in large finance departments. AI-powered automation can now achieve typical straight-through processing of 70% of vendor invoices and handle three-way matching instantly. This kind of system is both vital to managing workloads, and a bulwark of your overall fraud prevention strategy.
   b. Fraud detection and prevention: Procurement fraud represents a major risk to businesses internationally. Implementing appropriate controls (including clear approval hierarchies with multi-factor authentication, AI and ML powered detection protocols, and matching-based checks) is vital to protect your global payments integrity.
   c. Compliance protocols: Modern systems provide the basis for AI-backed automation of anti-money laundering and Know Your Customer (KYC) processes mandated by regulators. They also allow for instant reporting based on real-time visibility of your organization’s entire payments ecosystem. This is key to managing the burdens imposed by e-invoicing mandates in multiple countries and other “real time continuous reporting” responsibilities.
6. Strategic financial controls and policies: Once you’ve mitigated the workloads and risk associated with global payments, you’ll need to use embedded finance tools that integrate with your cash forecasting and working capital intelligence platforms in order to ensure that your payments are being made in a way that’s both compliant with the law, supportive to your vendors, and that lets you optimize your strategic and tactical liquidity management approach. You’ll also need to consider cost optimization of the payments protocols you use themselves: you can likely negotiate lower fees for high volume transactions on the same network and rail, further reduce fees and intermediary steps with data-rich transfer formats, and further enhance security. But you’ll have to established rules and routing processes ahead of time in order to do this.

What are the major options for managing global B2B payments

Serrala has been working with global enterprises to create payments system architectures that meet the needs of a modern, international business for decades. We’ve seen huge amounts of change over that time.

Our experience tells us there’s three basic options for organizations looking to adopt a more structured model to global B2B payments operations and processes.

1. Do it yourself: Create a global in-house payment factory. Many organizations have done this successfully (including many of our customers, who successfully deploy the principles of in-house banking, payments-on-behalf-of (POBO), and intercompany cash pooling to create global efficiencies and lower total cost of ownership while bringing a whole new strategic dimension to their ability to intelligently manage global working capital reserves.
   Advantages: Enhanced control, reduced costs and reliance on external banking partners, and full visibility of all global working capital with the capacity to optimize all aspects of your payment cycles.
   Drawbacks: The in-house approach isn’t always easy. Many businesses don’t have the resources on tap to run models like this, nor to bear the risk burden associated with developing a complex custom finance architecture that can’t easily be replicated or scaled in new markets or adjusted to market shifts, and the security of which has to be managed totally in-house too.
   Best for: Large multinational organizations with complex treasury operations that already leverage (or are experimenting with leveraging) advanced treasury management software like that provided by SAP’s In-House Banking and In-House Cash capabilities.
2. Leverage cloud-based B2B payment solutions: This approach enables a greater deal of efficiency and agility, reduces capex, and creates a more scalable architecture that’s primed for automation both now and in the future. You’ll be able to set up a system that works for you and your teams from scratch in line with your existing needs and infrastructure.
   Advantages: More freedom to scale, change, and evolve your solution as required, lower operational costs and technical debt. Provides more flexibility in terms of multi-rail selections, improves visibility, and removes the strain of FOREX optimization and multi-currency management. Allows for ERP integration to improve automation rates without enormous and complex technical investments.
   Drawbacks: Your finance and IT teams will have to work together to design, build, test, and deploy a model and infrastructure setup that works for them from scratch. You’ll also have to put in most of the legwork of managing compliance, building connectors between banking platforms and tools, and navigating the payments formats maze.
   Best for: Smaller growing enterprises with simpler operational needs that can be satisfied with cross-border B2B payments platforms that handle some of the thornier and costly pain points of global payments, but which don’t yet need to handle truly complex systems.
3. Outsource to a managed service provider: This is the simplest approach for organizations looking to eliminate the burdens of managing the global payments ecosystem. Whether that’s because their own resources and risk appetite aren’t enough to make it happen, or because the sheer complexity of their setup and its integration makes an in-house approach impractical.
   Advantages: Removes the burden of handling most of the complexity of the cloud-based platform approach while still leveraging cloud-based flexibility. Also reduces both compliance overheads and the setup and maintenance burdens associated with rail selection, security protocols, and clearance.
   Disadvantages: Depending on your precise needs, finding a provider capable of matching them can be difficult. Requires careful vetting for compliance, security needs, governance, and automation capacities.
   Best for: Rapidly growing organizations whose needs have grown beyond the capacities of digital global B2B payments management platforms, but who lack the capacity, resources, and technical know-how to create a full in-house payments ecosystem.

How to choose the right global B2B payments approach

1. Assess your current and future needs
   Before you decide which option to take, you’ll need to carefully map your own organizational payment profile. Consider things like:
   a. The number of currencies you typically transact in.
   b. Do you need to manage global payables and receivables, or are most of your global transactions monodirectional?
   c. What kind of payment volumes are you handling?
   d. How do they cluster? Are you mostly making large enterprise-to-enterprise transactions, or are transactions distributed across many smaller suppliers?
2. Assess vendor capabilities
   There are dozens of B2B payments solution vendors in the market today. These range from simple FOREX management tools like Wise to providers of enterprise-grade solutions specifically tailored to the complex payments requirements of organizations using specific ERPs.

At any level, a credible B2B payments processing solution should be able to provide:

1. Multi-rail connectivity and flexibility, supporting the major networks and protocols like SWIFT, SEPA, BECs, and BACs, and emerging real-time rails in the countries where you operate.
2. FOREX management depth, including not just the ability to handle conversions, but preferred-rate routing, multi-entity FOREX netting, and hedging integration. This is key to reducing your overall costs.
3. AI-powered routing and payment scheduling optimization. Leading vendors use AI to score each transaction for priority against your strategic needs and compliance requirements, and then assign them to the best processor, payment rail, FOREX settlement path, and batch based on the specific needs of each transaction.
4. Global compliance capacity. Different countries have different anti-money laundering requirements, different security requirements, and different rules around the rails and file types payments need to use to be considered legal. Providers that incorporate all these considerations are much more efficient and expose your organization to much less risk.
5. ERP integration. Your preferred supplier should support native connectors with your system of record in order to support real-time visibility and payment initiation directly from the ERP (and automate concerns like invoice processing and approval, matching, and posting, along with the associated overhead from foreign currency transactions and exchanges).
6. Security certifications. Your preferred provider must comply with industry standards for security and hold appropriate certification. You’ll need to check for non-negotiables like PCI DSS compliance, tokenization, multi-factor authentication, and real-time AI-powered fraud monitoring.
7. Total visibility across all entities. Consolidated real-time reporting across different currencies, entities, and payment approaches is now the standard for modern finance teams and CFOs. Your platforms should enable real-time insight into your cash position, payments system performance, and costs and status at the level of individual invoices. All while maintaining appropriate audit trails.

Frequently Asked Questions on Global B2B payments management

What is a cross-border payment?

As the name implies, a cross-border payment is a transfer paid from one country to another. These can include B2B supplier payments (especially in the age of SaaS), but also B2C payments and C2B e-commerce transactions and even personal remittances.
All cross-border payments incur interactions with multiple banks, currencies, regulatory environments, and processing protocols. They thus create risk exposure that’s particularly important for B2B transactions.

How do international B2B payments work?

Cross-border B2B payments require the input and cooperation of the payer themselves, their bank, the recipient’s bank, a payment rail provider, and the recipient’s own accounts receivable teams to ensure compliance and correct payment routing. They typically also require the use of specialized software like ERPs with in-built cross-border payment capabilities, dedicated B2B payment platforms, and may involve at least one correspondence bank and FOREX facilitator. Because of the complexity involved, transfers can take anything up to a week to clear on major international wire networks like SWIFT.

Why are our cross-border payments so expensive?

Because of the number of different entities involved and the complexities involved in both technical considerations like routing, and compliance checks on both the sender and recipient’s side, global B2B payments can carry high costs. This is of especial concern to large organizations with large international transaction volumes. Bank fees are generally applied at each “step” of a payment chain, and the need for intermediary support can often cause costs to spiral. Businesses relying on legacy banking infrastructure often pay over the odds because they rely on sub-optimal routing rather than assigning transactions to a more appropriate payment rail.

How can dedicated global B2B payments solutions reduce costs

Dedicated international payment platforms and more specialized enterprise B2B payment solutions centralize and automate the processing and management tasks associated with making compliant international B2B payments. They’re a superior option to traditional banking portals as they’re capable of quickly and flexibly assigning bulk transactions to the appropriate payment rail and corridor to optimize costs, and they further eliminate much of the manual workload and overhead associated with invoice processing, matching, reconciliation, and compliance.

How is AI improving global B2B payments management?

AI contributes to dynamic real-time payment routing for optimal cost effectiveness. It also enhances automaton rates in invoice processing and matching through smart data capture and intelligent 3-way matching. AI solutions further improve the process by contributing a powerful additional layer to security checks and anomaly detection, spotting erroneous and potentially fraudulent transactions before they’re executed for additional checks and remediation. This significantly reduces the need for manual handling of individual payments. Leading B2B payments solutions now leverage agentic AI in their workflows to create an end-to-end autonomous workflow for many payments transactions.

How can Serrala help us manage global B2B payments?

Serrala’s AI-powered B2B payments solutions are trusted by over 2,800 world-leading brands to achieve the highest possible process automation rates. Eliminating over 80% of manual efforts in accounts payable, saving weeks’ worth of time, and unlocking new possibilities in strategic decision making and company achievement.

We’ve developed our model of B2B payments automation to encompass the needs of growing global organizations that demand simplicity, scalability, and control in their payments ecosystem. Empowering you to stay agile, compliant, and future ready while maintaining and integrating existing workflows into a global setup that unlocks smarter, faster, and more secure payment operations.

Serrala solutions enable fully touchless processing and improve working capital availability through intelligent cash flow optimization, allowing global organizations to confidently to power key strategic investments.

Serrala’s B2B payments automation software solutions are available as fully standalone cloud or hybrid deployments with multiple ERP integrations, or as fully embedded extensions of SAP S/4HANA and EEC.

If you’re interested in learning more about what we can do for you – and how we can help you guarantee a seamless S/4HANA migration – get in touch with us today to book a demo.